We are having some issues with our disputes not being finished within the 90 day allowed time frame for POS charges.
1. We have Reg. E disputes that have not been fully processed by our processor, or the outcome of our Representment has not been resolved with the merchant. How do we need to answer these if we do not yet know the outcome? If it is a Reg. E dispute, I know that we have to follow the timeline provided. Do we take the loss if it is not resolved? There are times when we might have submitted a Rebuttal letter but haven't been notified of the outcome. There are also times when we've been debited for a representment but don't have the documents to determine if it still appears to be a valid dispute. Do we take that loss? Is there any 'wiggle room' on the deadlines or do we just lose the money if it is not completed?
2. We realize that Visa requires that we issue provisional credit for their merchant disputes. Do we use the same guidelines for these merchant disputes for the same situations listed above?
3. Do we have any recourse against the processor or the merchant if they do not abide by the VROL timeline that causes us a loss?

I realize this is a lot of information, our Operations department is currently working with me (the compliance auditor) to create clear-cut procedures so we will be able to follow consistent practices going forward and these are some questions they have presented.

The short answer to #1 - yes you have to take the loss regardless of what happens with any chargeback attempt unless you find that no error occurred or that they authorized it. You have to remember, chargeback rights are irrelevant to your Reg E requirements to your customer. More times than not, your chargeback issues aren't resolved before you have to approve or deny your claim.

I think the easiest way to write your procedures is to separate the customer portion/compliance requirements from the chargeback process and first thing identify if it's Reg E, unauhorized, error or a merchant dispute. If it's a Reg E claim, then follow your provisional credit and result timeframes. Chargebacks/requests for info are really only a potential tool to get more information, like sales slips, receipts, online order confirmations, etc., but they don't play any other role in your customer portion. Reg E and Visa rules don't care if you have chargeback rights or not or whether you'll take a loss or not. Just work the claims for the customer dispute perspective, not your rights under Visa/MC rules.

I've made our process as simple as possible, we provide provisional credit same day and start an investigation, if it's clearly fraud or we are certain the customer didn't do the transaction, we go ahead and approve the customers case immediately and give them final credit instead of provisional - then we try and see what our chargeback rights might be. If it's a case where we're not sure if the customer authorized the transaction, we still follow our immediate provisional credit process but we'll wait to make a decision based upon our investigation results using information we obtain by contacting the merchant, any additional information from the customer that's provided, and/or a information received during any chargeback process. We hope that we can receive information in time to meet the deadlines, but many times we can not. If you haven't received enough information during your investigation to sway you info believing the customer did in fact authorize the transaction, you just have to make your decision based on the information you have at the time. And yes, many times you'll find out later that they authorized it, but your case is closed and there's nothing you can do, except consider exiting the customer from the bank or shutting down any future cards.

Sorry if this ended up being long and rambling....

We do the same as ItNeverEnds. Provide provisional credit as quickly as possible and make if final if we are certain the customer wasn't involved. It is harder with Xbox, ITunes and Google Play and we see a lot of that. Most of them are well under $20 so it's not even worth requesting any information on. Those are the hardest decisions to me, usually because they don't complain the first 20 times they see the charges - they come in when they can fill a page with disputed items (more than 10).

Thank you for the information! It seems to me we do not have any recourse against our processor or the merchant and will be forced to take the loss when they do not adhere to the timelines we expect.